TRADE FINANCE: NATURAL RESOURCES


grown nearly eightfold over the past five years, with Deutsche Bank’s Natural Resources Finance team having deployed reserve-based lending (RBL) transactions to support the development of the Edvard Grieg, Alvheim and Johan Sverdrup fields. Despite the pandemic, it has continued to perform well, and it was given an inaugural investment grade rating of BBB- by S&P in July 2020. As anticipated for a company that is investment grade and similar to its peers (Aker BP and DEA Erdoel), Lundin is moving towards a more corporate capital structure to provide greater flexibility.


As a final step before completely moving from secured lending to unsecured debt issuance, the company refinanced its existing US$5bn RBL facility with secured


Figure 1: Lundin’s path to carbon neutrality 2020–2021 Emissions


reduction/energy efficiency


2022


Electrification using power from shore


>95% production by 2023 2023


Renewable energy investments


100% power usage in 2023 2024 2025


Natural carbon capture Offset remaining emissions from 2025


Lundin Energy carbon neutral from 2025


multicurrency term and revolving facilities totalling US$5bn. The deal, involving 16 banks (including Deutsche Bank), was announced on 14 December 2020.3 Importantly, these facilities also include a margin grid based not only on Lundin’s external credit rating, but also the company’s performance in achieving its ESG target key performance indicators (KPIs) on carbon intensity and renewable electricity generation as a proportion of electricity consumption. This transaction was important in order for Lundin to continue to grow as an investment grade company with the appropriate level of flexibility in its capital structure.


Lundin’s energy transition Lundin has set itself a clear and ambitious target of achieving carbon neutrality by


2025. It is already off to a very good start, producing oil at around 4kg of CO2


per


barrel produced, compared with 24kg of CO2


equivalent to removing over one billion passenger cars from the road,” states the company.4


for the entire industry. It aims to halve this to 2kg per barrel by 2023. “If all oil in the world was produced this way, it would save two billion tonnes of CO2


per barrel for peers and 18kg of CO2 per year,


Lundin is also aiming to have 100% of electricity consumption coming from renewables by 2025. In addition, it is the first company to provide a CarbonClearTM certification on barrels in one of its fields; the world’s first assured standard that certifies the full-life carbon footprint of


Lundin Energy’s Edvard Grieg platform


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